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C O M M E RC I A L
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C O M M E RC I A L
CONNECTIONS
NAR PRESIDENT
N A R C O M M E RC I A L L I A I S O N
C O M M E RC I A L C O M M I T T E E C H A I R
George Ratiu
D E V E L O P M E N T & S E RV I C E S C O O R D I N ATO R
Shara Varner
L E G I S L AT I V E P O L I C Y R E P R E S E N TAT I V E
Erin Stackley
R E G U L AT O RY P O L I C Y R E P R E S N TAT I V E
Stephanie Spear
PRINTED BY
www.omegaprinting.com
Realtor.org/Commercial
THE LATEST
Attend
Hill visits are back and your voice matters! Join us for the 2015
REALTORS Legislative Meetings and Trade Expo, May 1116th in Washington, D.C. There are many governance meetings
for commercial members, as well as a special networking reception just for you to meet your colleagues from across the country
- and maybe even make a connection on a deal! For a detailed
schedule and to register, go to Realtor.org/Midyear.
Discover
On pages 10-11 youll find a special section highlighting the resources, services and benefits that Commercial practitioners can
access and utilize, provided as part of your NAR membership.
If you have specific questions, or would like NAR to help your
local board develop or strengthen local Commercial Member
services, please contact Shara Varner at svarner@realtors.org.
Learn
Participate
The NAR REach Class of 2015 will launch later this month,
along with your opportunity to get involved as part of the programs Insight Panel. Your commercial practitioner perspective is
needed to help shape the tools and products of these companies.
Stay tuned to communications from NAR and if you are attending the May meetings in D.C., be sure to visit the Trade Expo and
meet the companies selected. Visit narreach.com to learn more.
Update
When was the last time you changed the batteries in your smoke
detectors at home? Take the time now to do so and also take 5
minutes to update your NRDS Member profile with your contact information and Fields of Business, which helps us ensure
you get the information best applicable to your specialty. Visit
Realtor.org and click on My Account to access your NRDS profile to make changes. Need help? Contact your local board or
NARCommercial@realtors.org.
NAR VIEWPOINT
A N OT E
F RO M
THE PRESIDENT
B Y C H R I S P O LY C H R O N , G R I , C I P S , C R S
C H R I S P O LY C H R O N , G R I , C I P S , C R S
C O M M E RC I A L C O N N E C T I O N S
SPRING 2015
ADVOCACY
FOCUSING
IN ON
C O M M E RC I A L I S S U E S
Every day, NAR advocates on behalf of you and your more than 1 million
member colleagues, as well as 75 million property owners. Our efforts in
Washington D.C. are focused on protecting your ability to do business so
that your time can be spent building relationships with your clients, conducting
transactions and strengthening your community.
1031 Like-Kind Exchange
SPRING 2015
C O M M E RC I A L C O N N E C T I O N S
Commercial Lending
Net Neutrality
C O M M E RC I A L C O N N E C T I O N S
SPRING 2015
ADVOCACY
2015 NAR
L E G I S L AT I V E
AND
R E G U L ATO RY
PRIORITIES
BUSINESS OPERATIONS
Protecting the business operations of members is
always a priority for NAR. There are a number of
issues before Congress and the Federal Regulatory
Agencies that could have a significant impact on the
business operations of real estate firms.
Dodd-Frank Act Regulations (3% Cap on Fees
and Points, RESPA/TILA Harmonization)
Technology Issues (Data Privacy & Security,
Copyright Protections, Net Neutrality,
Patent Reform)
Appraiser Independence Regulations
COMMERCIAL
More than $1.2 trillion in commercial real estate
loans will come due over the next few years, and
many of these deals will have trouble getting
financing. NAR supports consideration of legislation
and regulations to protect and enhance the flow of
capital to commercial real estate.
Commercial Real Estate Liquidity
Basel III
Lease Accounting
SPRING 2015
C O M M E RC I A L C O N N E C T I O N S
FREE
N AT I O N A L
EXPOSURE
FOR YOUR
LISTINGS
POWERED BY
COMMERCIALSEARCH.COM
BY THE NUMBERS
86,959
427,294
1.8million
USERS
PROPERTY LISTINGS
LISTING VIEWS
Source: February 2015; CommercialSearch.com is operated by Xceligent, a REALTOR Benefits Partner. Listings are
populated by aggregation of data uploaded from commercial real estate firms, franchises, individual brokers and agents, as
well as MLSs and CIEs. Go to www.CommercialSearch.com to add your listings.
C O M M E RC I A L C O N N E C T I O N S
SPRING 2015
ENRICHMENT
5 WAY S TO
B ROA D E N
YOUR
H O R I ZO N S
CONNECT WITH WHERE YOUR CLIENTS COME FROM &
W H E R E Y O U R B U S I N E S S I S TA K I N G Y O U
PURSUE EDUCATION
Financial Analysis for Commercial
Investment Real Estate (CCIM)
Commercial Real Estate Negotiations
(CCIM)
Foundations for Success in Commercial
Real Estate (CCIM)
Communicating Across Cultures (IREM)
International Aspects of Real Estate (RLI)
Certified International Property Specialist
(NAR)
Courses include Local Markets,
Business Tools as well as regional
courses on Europe, Asia/Pacific and
The Americas
At Home with Diversity (NAR)
SPRING 2015
C O M M E RC I A L C O N N E C T I O N S
3
4
5
C O M M E RC I A L C O N N E C T I O N S
SPRING 2015
COMMERCIA
ADVOCACY
EDUCATI
www.realtor.org/commercia
www.realtor.org/political-advocacy
D
esignations ALC, CCIM, CP
Online & Classroom Courses
R
EALTOR University Masters
Commercial Podcasts
Federal Level:
2015 Public Policy Priorities
Federal Issues Tracker
Commercial Issues & Actions
W
ashington Report
State & Local Levels:
REALTOR Party Initiatives
RPAC
Broker Involvement Program
PUBLICAT
& INFORM
RESEARCH
www.realtor.org/commerci
www.realtor.org/commercial/research
Commercial Real Estate Lending Survey Annual Report
Commercial Real Estate Market Survey Quarterly Report
Commercial Real Estate Quarterly Outlook
Expectations in Market Realities Annual Report
State-by-State International Business Reports
Local Market Assessment Case Studies
REALTOR University Journal of the
Center for Real Estate Studies
PULL
OUT
&KEEP
AS A HANDY REFERENCE!
10
SPRING 2015
C O M M E RC I A L C O N N E C T I O N S
C
ommercial Connections Qua
The Source Commercial Blog
Field Guides
N
AR Library eBooks, Journals,
Business Letter Templates and m
R
EALTOR Magazine Commer
N
AR Weekly Report Commerci
AL SERVICES
A quick guide to your NAR membership
ION
al/edu
TIONS
MATION
ial
, Audiobooks,
more
rcial coverage
ial section
TECHNOLOGY
www.realtor.org/commercial/tech
CommercialSearch
REALTORS Property Resource (RPR)
Xceligent
realtor.com/International
NAR REach Technology Accelerator Program Companies
REALTOR
BENEFITS
PROGRAM
www.realtor.org/programs/realtor-benefits-program
Financial Services & Risk Management
Personal Insurance
Marketing Resources
Electronics & Mobile Technology
Travel & Automotive
Technology Services
C O M M E RC I A L C O N N E C T I O N S
SPRING 2015
11
RESEARCH
T R A N S L AT I N G
THE MARKET
OUTLOOK
First quarter forecasts are typical in the business world, but relating those
predictions to the commercial real estate industry can be a challenge.
We solicited insight from George Ratiu, NARs Director of Commercial
Research, and members across the country for their take on why the outlook for
commercial real estate is looking so good from their point of view.
Why is 2015 expected to be a strong year for
commercial real estate?
As economic factors continue improving
employment, consumer confidence and spending,
business investments commercial real estate
fundamentals strengthen. Net absorption is expected
to increase across all property types in 2015, as demand
for commercial space grows. Completions of new
commercial spaces are also growing, but at a slower
pace than absorption, leading to declines in availability
and rising rents. The only exception to the rule comes
in the apartment markets, where strong new supply is
already exerting downward pressure on rents.
As fundamentals ensure growing positive cash flows,
investors continue to find commercial assets attractive.
Since the post-recession trough of 2009, investment
sales have posted higher volume with each subsequent
year and 2014 was no exception. Sales volume in
2014 totaled $433 billion, according to Real Capital
Analytics. Prices rose across the board, with apartment
and CBD office properties exceeding pre-recession
12
SPRING 2015
C O M M E RC I A L C O N N E C T I O N S
C O M M E RC I A L C O N N E C T I O N S
SPRING 2015
13
RESEARCH
INDUSTRIAL SPACE
VACANCY
RATES
RETAIL SPACE
VACANCY
RATES
0.1%
0.4%
0.3%
GDP: 3.1
MULTIFAMILY
VACANCY
RATES
0.1%
171,978
SPRING 2015
C O M M E RC I A L C O N N E C T I O N S
RESEARCH
MEMBER PERSPECTIVES
We are seeing activity across all segments and classes
increasing significantly. Whereas Best of Class A properties
used to only be in a market of their own, commanding
the majority of the attention, were now seeing all asset
categories and property classes receiving significant activity.
This is a collusive cycle with market activity driving new
development, which in turn drives 1031 re-investment.
Maintaining the 1031 tax deferment and reinvestment
structure allowed under the current tax code is what keeps
the cycle flowing.
JARED BOOTH, CCIM, MBA
Salt Lake City, Utah
If the U.S. sustains current reduced oil prices, not only will
it put an average of about $750 of additional spendable
money in each household, an equal amount will be saved
by households in the Northeast or Midwest, which benefit
from less expensive heating oil. This translates to higher
retail spending, more families taking that long overdue
vacation, etc. Downtowns are also hot! Its not necessarily
office, and not just the 24-hour cities, such as NY, SF
and D.C., but Orlando and Charlotte that are seeing
construction booms, which are in large part multi-family
projects. This will spill over into additional demand for
restaurants, shopping, etc.
LOU NIMKOFF, CCIM, CPM
Winter Park, FL
One of the most challenging issues facing commercial
real estate the last few years has been the lack of available
funds for the purchase or refinancing of new projects. I
am encouraged to see that capital is now available from
local and regional banks for the purchase or refinancing
of projects. I personally had three banks bidding on the
financing for a purchase I was making. Of course, deals
need a down payment and businesses need cash flow, but
it is great news for us brokers and investors.
DAN SIGHT, CCIM, SIOR
Leawood, KS
C O M M E RC I A L C O N N E C T I O N S
SPRING 2015
15
RESEARCH
C RO S S - B O R D E R
INVESTMENT ACTIVITY
by Peter C. Burley, CRE, Director, Richard J. Rosenthal Center for Real Estate Studies
Real estate investment has become a global enterprise. Both the U.S. and
Canada are on investment target lists for investors from all over the world.
Global transaction activity has soared in the last few years as capital seeks solid
returns, market growth and stability. Much of that activity is being directed
toward the North American markets.
In fact, foreign investment in both residential and
commercial real estate in both the U.S. and Canada is
changing and challenging the market in dramatic
ways. In the case of commercial real estate markets,
foreign purchases of U.S. properties totaled $41 billion
in 2014, according to a recent CBRE report, roughly
about 11% of all investment in U.S. property assets.
Small wonder. The U.S., Germany, U.K., and Canada
rank at the top of foreign investor lists for stability
and security, according to the Association of Foreign
Investors in Real Estate (AFIRE), in its latest 2015
survey of members. Switzerland ranks fifth.1
AFIRE SURVEY
MOST STABLE & SECURE COUNTRIES
2015 2014
1.
2.
3.
4.
5.
UNITED STATES
(1)
GERMANY (3)
UNITED KINGDOM
(5)
CANADA (2)
SWITZERLAND
(4)
16
SPRING 2015
C O M M E RC I A L C O N N E C T I O N S
RESEARCH
CANADA
WHAT PERCENT
OF INTERNATIONAL
CLIENTS ARE FROM:
UNITED STATES
CONTINENTS
ASIA
EUROPE
LATIN AMERICA
MIDDLE EAST
OTHER
3
4
5
C O M M E RC I A L C O N N E C T I O N S
SPRING 2015
17
BUSINESS TOOLS
R E A LTO R S
P RO P E RT Y R E S O U RC E
A COMMERCIAL TOOL FOR YOUR BUSINESS
18
SPRING 2015
C O M M E RC I A L C O N N E C T I O N S
BUSINESS TOOLS
C O M M E RC I A L C O N N E C T I O N S
SPRING 2015
19
ANNOUNCING
NARS OFFICIAL
R E A LTO R C R E D I T C A R D